Meet more of Taylor & Alex's whānau

A story of their battles with a confusing, debilitating, mana-demeaning system designed to belittle and extinguish hope.

Jul 29, 2025

Manaia, Rama, Taylor & Alex, and Sam & Chris all face a system that converts their additional paid employment into family in the hand income at a rate that is well below any legislated minimum, or calculated living, wage rate.

Chart showing the additional income in the hand per additional hour worked by each family. The vertical axis ranges from 0 to $30 per hour. The horizontal axis depicts each of the 4 different families and their situations. Their additions to in the hand income are shown to range from $7.30 per hour to $10.65 per hour. Horizontal lines depict the minimum wage at $23.50 per hour, and a living wage at $27.80 per hour.

This note follows from Taylor and Alex’s earlier story. There have been changes to their situation, along with clarification of their eligibility for Jobseeker Support (JS) and Winter Energy Payments (WEP). There is some ambiguity around information provided on the Work and Income website, although that does not serve as any defence to incorrect claims. Thank you to those who alerted me to the apparent error. Nevertheless, correcting the error does not change the non-sense or the non-simplicity of the system faced by Taylor and Alex.

Subsequently, Taylor and Alex have checked with more whānau members to understand whether or not their story was out of the ordinary. So, meet Taylor’s sibling Sam, and their cousins Rama and Manaia.

Manaia is single, with living-wage employment opportunities available.
Rama is a sole parent with 2 children1, also with living-wage employment opportunities available.

Taylor and Alex, with their 2 children, now realise they are ineligible for JS and WEP payments. Fortunately, though, they now both have better-paid living-wage employment opportunities available.
Sam and partner Chris also have 2 children, but have only minimum-wage employment opportunities available.

All live in the Island Bay southern suburb of Pōneke2. Their extra employment brings in additional in the hand income of between $7.30 to 10.65 per hour.

For the record, the legislated minimum wage in Aotearoa is $23.50, while a living wage (as calculated by the Living Wage Movement Aotearoa New Zealand) is $27.80 per hour3.

Manaia

Manaia is single with no children and no student loan4 and pays the median rent of $415 per week for a 1 bedroom flat. Without employment prospects Manaia would receive the Jobseeker Support (JS) payment alongside Winter Energy Payment (WEP) and Accommodation Supplement (ASUP) totalling in the hand $592 per week. A clearly unliveable situation.

Fortunate enough to have living-wage opportunities, 6 hours a week employment pushes weekly in the hand income to over $700. But thereafter, the reduction of JS - at the gut-punching rate of 70 cents for every extra $ earned - slows in the hand increases to a snail’s pace. Consequently, the effective marginal tax rate (EMTR) faced by Manaia soars into 80%+ stratospheric territory.

Chart showing total income in the hand on the vertical axis, by different categories of wage income, JS+WEP, and ASUP. The horizontal axis indicates the number of hours per week that Manaia is employed. The right-hand axis (ranging from 0% to 100%) shows the EMTR that Manaia faces as their number of hours employed increases. A black dashed line illustrates this EMTR, beginning at 19.2% rising to over 80% for 6 to 25 hours, before dropping back to 44.2% and then settling at 56.7% as Manaia adds more hours up to full-time employment.

Part-time work for more than 25 hours per week sees Manaia’s income rise above the JS threshold, bringing down the EMTR and sees increases in the hand quicken noticeably. However, as ASUP now begins to decline (at a rate of 25 cents for every extra $ earned), the EMTR faced by Manaia settles at 44.2%. This is noticeably well above the top marginal income tax rate of 39%, despite Manaia’s income being near $850 per week (an annual $44,000), below the economy-wide median income5.

At a full-time 40 hours per week, Manaia sees $1,018 per week in the hand. But with gross income tipping the 53,500 per annum mark and so entering the 30% income tax bracket, Manaia faces an EMTR rising to 56.7%.

In moving from 0 hours to 40 hours per week, Manaia receives an additional $426 per week in the hand (from $592 to $1,018). This is the equivalent of $10.65 per hour, well below the minimum wage, let alone a living wage.

Rama

Rama is a sole parent with two children and pays the median rent of $600 per week for a 2 bedroom flat. Without employment prospects Manaia would receive the Sole Parent (SP) payment alongside WEP, the Family Tax Credit (FTC) component of Working for Families, and ASUP totalling in the hand $1,047 per week. It is no surprise that Rama struggles continuously to meet all expenses.

Like Manaia, Rama is fortunate enough to have living-wage employment opportunities. And again, the first 6 hours a week of employment sees weekly in the hand income visibly rise, to near $1,200. But then the reductions in support payments brutally cut in. Firstly, the SP declines by 30 cents for every extra $ earned and then after 10 hours per week by 70 cents per extra $ earned. The resulting EMTR of 89.2% is pushed to 93.3% (after 14 hours per week) as FTC payments begin to decline at 27 cents for every $ of other income. Another hit (at 24 hours per week) pushes the EMTR to 95%, as the ASUP also begins to decline (25 cents for every $ of other income). These deductions see Rama’s in the hand income effectively stuck near 1,250 per week, over a range from 10 to 30 hours employed.

Chart showing total income in the hand on the vertical axis, by different categories of wage income, SP+WEP, FTC, IWTC, and ASUP. The horizontal axis indicates the number of hours per week that Rama is employed. The right-hand axis (ranging from 0% to 100%) shows the EMTR that Rama faces as their number of hours employed increases. A black dashed line illustrates this EMTR, beginning at 19.2% rising to over 90% for 14 to 34 hours, before dropping back to 83.7% as Rama adds more hours up to full-time employment.

However, at 34 hours per week of living wage employment, Rama’s earnings are beyond the SP (plus WEP) threshold. Consequently, those support payments are effectively replaced by the In-Work Tax Credit (IWTC) component of Working for Families. At this point there is a noticeable jump in income in the hand. But the lift in overall income is stabilised at $1,400 per week, as the EMTR soars again. At 40 hours per week on the living wage the EMTR settles at 83.7%, with annual income now in the 30% income tax (plus 1.7% ACC) bracket, alongside ASUP (25%) and FTC (27%) deductions.

In moving from 0 hours to 40 hours per week, Rama receives an additional $352 per week in the hand (from $1,047 to $1,399). This is the equivalent of $8.80 per hour, well below the minimum wage, let alone a living wage.

Taylor and Alex

We met Taylor and Alex in an earlier story. Their situation has changed in that, fortunately, both now have living-wage employment opportunities available to them. This was welcome good news, balancing the bad news that clarified that in their earlier situation (where Taylor was already in full-time employment at $25 per hour) neither would have been eligible for JS or WEP payments.

Consequently, with Taylor now in full-time employment at $27.80 per hour, FTC, IWTC and ASUP supports lift the family’s in the hand total to $1,468 per week, or $843 after $625 rent is paid. As before, this remains a more than difficult budget to juggle. It seems pertinent to remember that Statistics New Zealand Tatauranga Aotearoa Household Economic Survey estimated average household weekly expenditure for the year ended June 2023 (which is the latest data currently available) as $1,597.50. For non-housing expenditure, that estimate is $1,252.30 per week.

So they now look to exploring Alex’s living-wage employment opportunities.
And without JS payments they look forward to not having to fear the crippling 70 cents in the $ gut-punching abatement rate.

Chart showing total income in the hand on the vertical axis, by different categories of wage income, FTC, IWTC, and ASUP. The horizontal axis indicates the number of hours per week that Alex is employed. The right-hand axis (ranging from 0% to 100%) shows the EMTR that the family faces as Alex's number of hours employed increases. A black dashed line illustrates this EMTR, beginning at 64.2% rising to 71.2% from 12 hours, before dropping back to 31.2% for more than 40 hours per week.

However, they quickly realise that each extra $ of living-wage income for Alex’s employment immediately sees FTC and ASUP deductions of 27 cents and 25 cents, respectively. Alongside the initial income tax rate of 10.5% (and 1.7% ACC), the family immediately faces a disheartening EMTR of 64.2%.

Nevertheless, in the hand income continues to rise steadily, despite Alex’s employment after 12 hours per week shifting gross income into the 17.5% income tax bracket and pushing up their EMTR even further to 71.2%.

When Taylor and Alex are both in full-time 40 hours per week living-wage employment all their supports will have been fully abated. Any hours above 40 hours per week would face an EMTR of 31.7% (being income tax plus ACC).

In moving from 0 hours to 40 hours per week of employment for Alex, the family receives an additional $351 per week in the hand (from $1,468 to $1,819). This is the equivalent of $8.78 per hour, well below the minimum wage, let alone a living wage.

Chris and Sam

Like Taylor and Alex, Chris and Sam have 2 children, but have only minimum-wage employment opportunities available to them.

With Sam in full-time employment, their income is already beyond the threshold for JS (or WEP) supports. But, like Taylor and Alex, eligibility for FTC, IWTC and ASUP support payments lifts the family’s in the hand income to $1,429 per week.

As Chris takes up part-time minimum-wage employment, they face similar obstacles to others in their whānau. In the hand income gradually rises, despite support payments similarly gradually declining. Similar to Taylor and Alex, Chris and Sam initially face an EMTR of 64.2%, rising to 71.2%, despite their employment being at the minimum wage, rather than a living wage, rate.

However, at 40 hours employment for both Chris and Sam at the minimum wage some IWTC and ASUP supports remains, as they have yet to reach the threshold for total abatement.

In moving from 0 hours to 40 hours per week of employment for Chris, the family receives an additional $292 per week in the hand (from $1,429 to $1,721). This is the equivalent of $7.30 per hour, well below the minimum wage, let alone a living wage.

The children

Yes, these pictures all show increases in income in the hand as a result of taking up further employment opportunities. However, for Rama, Taylor & Alex, and Chris & Sam the prospect of finding appropriate childcare and/or after-school care adds even further salt into their wounds, as they contemplate their meagre gains from the additional 40 hours of employment they are expected to undertake.

Postscript

This note is not aimed at the current, or any particular previous, administration. The situation that Taylor and Alex and their whanau face has been here for many, many years. Way, way too many years.

Rather, this note is for those who continue to actively pedal and stoke fears of a truly progressive income tax scale, alongside capital gains and wealth taxes, on the grounds they would hinder work incentives. Or, the equally laughable diversion that they risk lower productivity. They, of course, have never experienced the marginal tax rates of over 50-60+% faced by the Taylors and Alexs of our community, and their whānau, on a regular and recurring basis.

Yes, the beast that is the EMTR has been ingrained in our system for many years. But those grappling at the frontline with this beast continue to see no change, as policy leaders and power brokers alike prefer to look askance.

Bluntly, the policy leaders and power brokers continue to be foolishly wedded to a punitive-first approach to social security. That is, a belief that punishment - or the threat of punishment - will somehow engender proper behaviours and enforce contributions from all.

But that punishment - whether in the form of sanctions or EMTRs that range from disheartening, gut-punching, to outright stratospheric - does not engender positive productive contributions to economy and community, as has been proven repeatedly through many studies.

Rather, punishment (or its threat) leaves many in our community disillusioned, with a sense of hopelessness and exclusion. And the hurt from such a punitive-first approach continues to accumulate for years and across generations.

The 2019 WEAG report Whakamana Tangata recommended policy leaders and power brokers restore dignity to social security. With dignity, families and whānau can embrace hope and genuine opportunities and no longer live in fear of punishment for a situation over which they had no control, power, or influence.

A non-punitive approach and a more generous, supportive, community surrounding our whanau, would provide adequate incomes (alongside quality public services) for all, with the expectation that mutual responsibilities will ensure all contribute positively and productively to their communities and to Aotearoa.

And, yes, that does mean a progressive income tax system that recognises higher incomes are reaped through supportive community effort and the presence of inclusive public services and safety nets for all.

This note is for all those who prefer to turn a blind eye in the face of irrefutable evidence of a broken system that continues to harm our people and communities. The very people and communities it nobly claims to support.

As for Taylor and Alex, and for Chris and Sam, both children are over 3 years old and so none of these families are eligible for the Best Start payments component of Working for Families.

All Accommodation Supplement support payments calculated use Area 2 thresholds, with median rent payable as per Tenancy Services data.

The living wage is set to increase to $28.95 per hour from 01 September 2025.

If any of Taylor’s siblings or cousins were to have had a student loan, repayments would be triggered in that income above the threshold of $464 per week would be subject to a 12 cents in the $ deduction.

Statistics New Zealand Tatauranga Aotearoa estimates median weekly income for 2024 of $959 (or an annual $49,870).